2-year yield hits highest level since 2007 as traders weigh potential for more rate hikes

U.S. Treasury yields rose Monday as investors digested comments from Federal Reserve Chair Jerome Powell.

The yield on the short-term 2-year Treasury note was about 4 basis points higher, trading at about 3.429%. Earlier in the day, the rate hit its highest level since 2007.

The yield on the benchmark 10-year Treasury note rose nearly 8 basis points to 3.114%, while the yield on the 30-year Treasury bond gained more than 4 basis points to 3.247%. Yields move inversely to prices, and a basis point is equal to 0.01%.

It comes shortly after the Fed’s Powell delivered his annual policy speech at Jackson Hole, Wyoming, on Friday.

Powell said that the U.S. central bank will “use our tools forcefully” to attack inflation that is still running near its highest level in more than 40 years. He acknowledged that rising interest rates will cause “some pain” to households and businesses.

“Powell sent a short and direct message that there won’t be a Fed pivot anytime soon,” Ed Moya of Oanda wrote. “Investors were expecting that once the US got some ugly data, perhaps a couple negative NFP reports, that the Fed would come to the rescue, but that might not be the case.  Premature loosening won’t be happening on the first signs that the economy is slowing down quickly and that raising doubts for anyone who bought stocks earlier this month.”